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The Impact of Workforce Age Heterogeneity on Company Productivity

Author

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  • Uschi Backes-Gellner

    (Institute for Strategy and Business Economics, University of Zurich)

  • Stephan Veen

    (Institute for Strategy and Business Economics, University of Zurich)

Abstract

We analyse how the age structure of a company’s workforce affects company performance using a linked employer employee panel dataset. With demographic changes at hand, this is of utmost importance for firms and organisations. Focussing on the organizational, not the individual level, we examine the effect of changes in age heterogeneity of a company’s workforce on company productivity. Incorporating theoretical insights and empirical results on aging and age diversity from multiple and very diverse disciplines, we conduct a cost-benefit analysis to evaluate how changes in age heterogeneity may affect organizational performance. Our dataset contains more than 18,000 German firms and 2 million employees over 10 years. We find significant effects of age heterogeneity on firm productivity, and that these effects are particularly moderated by type of tasks. There are positive productivity effects of increasing age heterogeneity, but only for companies and workforces conducting innovative or creative tasks.

Suggested Citation

  • Uschi Backes-Gellner & Stephan Veen, 2008. "The Impact of Workforce Age Heterogeneity on Company Productivity," Working Papers 0078, University of Zurich, Institute for Strategy and Business Economics (ISU), revised Sep 2009.
    • Handle: RePEc:iso:wpaper:0078
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    1. Göbel, Christian & Zwick, Thomas, 2010. "Which personnel measures are effective in increasing productivity of old workers?," ZEW Discussion Papers 10-069, ZEW - Leibniz Centre for European Economic Research.
    2. Göbel, Christian & Zwick, Thomas, 2013. "Are personnel measures effective in increasing productivity of old workers?," Labour Economics, Elsevier, vol. 22(C), pages 80-93.

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    More about this item

    Keywords

    age heterogeneity; demographic change; organizational performance; productivity effects;
    All these keywords.

    JEL classification:

    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition

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